The strong historic links between Australia and Israel were provided context by renowned author and historian Mr Kelvin Crombie, who introduced keynote speaker Ambassador Mark Sofer. Linking back to the battle of Beersheva and the formulation of the Balfour Declaration that destined the establishment of the modern State of Israel, the continual relationship between Australia and Israel ties strongly with heritage, culture, and through extension to bilateral trade.

His Excellency Mark Sofer drew on the evolvement of the Israeli economy, driven by innovation through necessity. Israel commenced its Statehood with an export market of a limited range of agricultural products. Its evolvement has been heavily contingent on human capital.

His Excellency Mr Mark Sofer, Ambassador of Israel to Australia

With a population of 9 million people and a GDP of approximately $US400 billion, Israel has established itself as a hi-tech leader. The Ambassador noted approximately 10% of the workforce work in this area and strategies are in place to increase this level of participation where skills are heavily in demand.

Noting the critical presence of global R&D centres, Ambassador Sofer cited that 0.03 of national GDP is applied to venture capital investment through research. This is more than double of any other country. The cycle of venture funding also commences earlier through the generation of ideas, a strong contributing factor to Israel’s economic success.

Ambassador Sofer drew on the combination of economic, scientific and cultural factors that all feed into Israel’s economic ecosystem. In describing the global focus of Israel’s economic activity the following elements all contribute;

Policy

Economic policy for start-up business has bipartisan support, a rarity across the political sector in Israel. The catalyst for start-up activity was the Government Yozma fund, a grant driven policy approach that allows Government to assume and accept start-up funding risks. The successes from the program return dividends and repayments that outweigh the costs of funding unsuccessful ventures. The Ambassador Yozma as the vehicle that transformed the economy.

Natural Circumstances

Israel evolved with limited natural resources. Whilst recently discovered gas fields have since transformed Israel into a net energy exporter, contemplation can be given to the scenario that the drive for tech innovation may not have been accelerated had these resources delivered export receipts to Israel early in its Statehood.

Ambassador Sofer also observed that the small population and geographic location of Israel made its domestic market too small to accommodate economies of scale. By necessity Israel needs to engage internationally and go global from day one.

Israel has successfully absorbed more than 1 million Russian immigrants. The Ambassador spoke of the impact of immigration on economic development, particularly the blend of skills and the drive to reskill in many technical areas. This immigration across the Former Soviet Union came at a time when global markets confronted an “east meets west” evolvement. With the connections, language, and understanding to connect the Western technology revolution to a region that previously resided behind the iron curtain, Israel leveraged its immigrants to further advance its global economic activity.

The role of the military is also a critical factor in uniting the country, skilling young leaders prior to University entrance, delivering innovation, and building relationships. The experience of national service is carried into the commercial markets.

Branding

Israel has a hi-tech society, a sector of the economy that took to a life of its own. The Ambassador noted that the substance of the “product” of innovation is present to support the evolution of the “Start-Up Nation” brand. “In almost every field of endeavour Israel impacts how we live our lives. Israel is seen as country that has something to offer the economic development of other nations”.

Luck

On a cautionary note, Ambassador Sofer mentioned that Israel is small and due to its global markets it is more susceptible to market fluctuations. The risk, exposure and vulnerability of this impacts Israel more than other Countries. Coupled with resource shortages; a thirst for innovation that far exceeds the capacity of the workforce to deliver, Israel is addressing the skills gap and market security through ongoing cultural and educational transformation. This extends to minority sectors of the workforce such as Arab and Ultra-Orthodox citizens who were initially not as readily integrated into the hi-tech sector. The Ambassador summed this up by saying “success might not be guaranteed, but 100% effort is critical”.

Mr Mark Majzner, Managing Director, 31NS -Thirty One North South and His Excellency Mr Mark Sofer, Ambassador of Israel to Australia

Looking Forward

The cultural and historic context of Israel delivers much to the psyche of Israeli business. Ambassador Sofer drew on Jewish history that preceded the nation State, whereby merchant trade and the travails of Jewish migration led to interconnected Jewish communities and ancient supply chains. “In this sense, the Jewish people experienced globalisation before it began”.

There are two market sectors that Ambassador Sofer believes will be of importance and benefit, particularly to the Australia-Israel economic relationship. One is cybersecurity, which he described as “one of the most important frontiers facing all of us.” The worlds systems for banking, health, defence, and transport amongst others are dependent on effective cyber security. Israel attracts 20% of global investment into Cyber Security research and maintains strong capabilities in this area. The other emerging growth area referenced related to autonomous vehicles and transportation, also important for both companies.

Ambassador Sofer’s address was followed by Q&A facilitated by Hon Kerry Sanderson AC, where topics of food security, the balance of trade, and reach into Asian markets were discussed.

In proposing a vote of thanks, Mr Mark Majzner, Managing Director of 32 North South, spoke of his experience in facilitating delegation activity for the AICC(WA), and the impact that this has on local business development. In forging closer economic ties, the role of Western Australia is important and significant to closer economic relations between Australia and Israel.

Mark Sofer is a career diplomat with the Israel Ministry of Foreign Affairs.

After receiving his BA in Economics and International Relations from the London School of Economics, Mark took an MA in Political Science at the Hebrew University in Jerusalem. Following his studies, he performed his military service before joining the Ministry of Foreign Affairs.

His distinguished career with the Ministry has seen him posted to Peru, Norway, and New York, before being appointed as Ambassador to Ireland, and later as Ambassador to the Republic of India and, concurrently, Non-Resident Ambassador to the Democratic Socialist Republic of Sri Lanka. His career also spans acting as a Policy Advisor to the then-Foreign Minister of Israel Shimon Peres, and heading a prestigious non-profit foundation, the Jerusalem Foundation.

Before his posting to Australia, Mark served as Deputy Director General of the Foreign Ministry and Head of Asia and Pacific Division.